samsung in china :: essays research papers

environmental AnalysisExternal EnvironmentChinese food market- allay collectivistic economyhuge gap between the stated plans and the actual business leader of government to manage and control the economytremendous amount of stinting interaction took place outside the governments formal economic plan-many smugglings and piracies-regional blockades-over-employment problemChinese color TV Market-full production capacity in demand flockr battleground-high competitionJapanese firms high-end commercialize. Increasing production bases domestic help Firms low-end commercialize. But they were less agonistical in large screen TV.- low color TV marketplace was shrinkinglarge market size of these product lines facilitated the fast achievement of cost decrease(economy of the scale, learning effect)Consumer analysis- tho 41% of households had color TV80% of urban, 28% of ruralLow-end market is not a viable long-term. But overall market was still expanding.-Buying power expanding both h igh-ends and low-ends -Tendency that first image of a product lasted long in the eyes of the consumer.the reason for differentiation essential focusing on high-ends -consumer preferenceUrban- brand cause, functionality were important factors.Rural- reasonable grapheme and low price were preferred.-High protected market too oftentimes tariff costlocalization neededDomestic (Korean) Market-Deteriorating of competitive advantage rising the labor cost-Korean government constitution supportive of big businessgetting worse of Korean marketLosing the M/S in the U.S. and no longer competitive in the low-end productneed to change the strategy focusing on high-end, high tech-Liberalization of Korean marketForeign firms were permitted to sell their product at one timeMore competitive in Domestic market, losing the domestic M/SSamsung had to expand the foreign market.Internal EnvironmentExperience in the U.S.- aline up the subsidiary there in 1979-Focusing on the low-end market segment ba sed on competitive labor cost in Korea because of large demand and low competition base, and low barrier in the U.S.-Samsung produced a few of the most popular sizes TV for cost reduction through economies of scale and the experience curve.-Dual brand policy adopting emptor brand name(large retailers or OEM) mostly further trying to build its confess brand image-Establishing a production subsidiary in the U.S. because of trade barrier-Policy of Japanese firms targeting high-ends for differentiation through brand name recognitionMatsushita 4% of M/S in 1995 but could be high-price, higher profit-Policy of Samsung still pricing strategy level though it had good quality of product3% of M/S, but much less profit than Matsushita and facing intense competition- immensity of TV industry to Samsung second proportion of Samsung electronicsIt was getting worse in situation of Samsung electronics, so needed some way to solve these problemsMarket participation in China-later market entering than Japanese firms-The establishment of SCH would enhance its image in China and speed up the accumulation of local knowledge of the market.